The Fed asked respondents how they would pay for a $400 emergency. The answer: 47 percent of respondents said that either they would cover the expense by borrowing or selling something, or they would not be able to come up with the $400 at all. Four hundred dollars! Who knew?

Well, I knew. I knew because I am in that 47 percent.

I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5—literally—while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.

You wouldn’t know any of that to look at me. I like to think I appear reasonably prosperous. Nor would you know it to look at my résumé. I have had a passably good career as a writer—five books, hundreds of articles published, a number of awards and fellowships, and a small (very small) but respectable reputation. You wouldn’t even know it to look at my tax return. I am nowhere near rich, but I have typically made a solid middle- or even, at times, upper-middle-class income, which is about all a writer can expect, even a writer who also teaches and lectures and writes television scripts, as I do. And you certainly wouldn’t know it to talk to me, because the last thing I would ever do—until now—is admit to financial insecurity or, as I think of it, “financial impotence,” because it has many of the characteristics of sexual impotence, not least of which is the desperate need to mask it and pretend everything is going swimmingly. In truth, it may be more embarrassing than sexual impotence. “You are more likely to hear from your buddy that he is on Viagra than that he has credit-card problems,” says Brad Klontz, a financial psychologist who teaches at Creighton University in Omaha, Nebraska, and ministers to individuals with financial issues. “Much more likely.” America is a country, as Donald Trump has reminded us, of winners and losers, alphas and weaklings. To struggle financially is a source of shame, a daily humiliation—even a form of social suicide. Silence is the only protection.

Gabler goes on, in great detail, to describe how he and his wife got to this place. It’s well worth reading, because a lot of it will sound very familiar to many people. To summarize the main points specific to Gabler:

1) He chose to live in New York, which is one of the most expensive places to live in the country;
2) He chose to be a writer, not the most lucrative and stable career;
3) He and his wife chose to put their kids in private school, something they felt was necessary in their Brooklyn neighborhood, but an expense they could have avoided or dramatically lessened had they lived in another part of the country (they eventually moved to the Hamptons to get out of paying that tuition);
4) He and his wife believed their two children had “earned” the right to go to very expensive universities, and they spent everything they had, and the inheritance his parents planned to leave for him, on educating the girls;
5) They got caught in the housing crash and had to sell a Manhattan apartment they owned at fire sale prices;
6) Given the way his income as a writer is structured, taxes were a bitch (as a writer, trust me, this is true).

Gabler’s is not a case of good-paying jobs (e.g., industrial manufacturing) disappearing. His, as he readily acknowledges, is a problem that he caused for himself. And that gets to the more important part of the piece:

Choice, often in the face of ignorance, is certainly part of the story. Take me. I plead guilty. I am a financial illiterate, or worse—an ignoramus. I don’t offer that as an excuse, just as a fact. I made choices without thinking through the financial implications—in part because I didn’t know about those implications, and in part because I assumed I would always overcome any adversity, should it arrive. [Here he lists some of this choices] But, without getting too metaphysical about it, these are the choices that define who we are. We don’t make them with our financial well-being in mind, though maybe we should. We make them with our lives in mind. The alternative is to be another person.

This is interesting. He felt that to choose otherwise would have made him inauthentic, untrue to himself. He felt that he deserved the life he had, and could not choose otherwise without betraying himself. I think this must be an extraordinary thing, in terms of history: people who spend recklessly to give themselves the lives they think they deserve. If you think about it, though, our culture, which valorizes Authenticity, encourages this.

So that was stupid of him, but it’s an error many of us would be subject to. If for some reason the market for my writing dried up, and I had to take a job doing something else to support my family, I would do it. But I would probably resist it for as long as I could, because it’s very hard for me to separate my sense of identity from my writing. Still, bills have to be paid, and I would hope that I didn’t hold out for long. But as we know, human nature is such that we don’t see what we don’t want to see until we have no choice.

This part of Gabler’s piece struck me as deeply true:

So who is at fault? Some economists say that although banks may have been pushing credit, people nonetheless chose to run up debt; to save too little; to leave no cushion for emergencies, much less retirement. “If you want to have financial security,” says Brad Klontz, “it is 100 percent on you.” One thing economists adduce to lessen this responsibility is that credit represents a sea change from the old economic system, when financial decisions were much more constrained, limiting the sort of trouble that people could get themselves into—a sea change for which most people were ill-prepared.

He goes on to talk about how contemporary America is built on consumer credit, and the mentality that goes along with it:

Part of the reason credit began to surge in the ’80s and ’90s is that it was available in a way it had never been available to previous generations. William R. Emmons, an assistant vice president and economist for the Federal Reserve Bank of St. Louis, traces the surge to a 1978 Supreme Court decision, Marquette National Bank of Minneapolis v. First of Omaha Service Corp. The Court ruled that state usury laws, which put limits on credit-card interest, did not apply to nationally chartered banks doing business in those states. That effectively let big national banks issue credit cards everywhere at whatever interest rates they wanted to charge, and it gave the banks a huge incentive to target vulnerable consumers just the way, Emmons believes, vulnerable homeowners were targeted by subprime-mortgage lenders years later. By the mid-’80s, credit debt in America was already soaring. What followed was the so-called Great Moderation, a generation-long period during which recessions were rare and mild, and the risks of carrying all that debt seemed low.

The difference between the way my father’s generation and my generation regard credit is a conceptual chasm. My father regarded credit cards as at best a necessary evil. Me, I couldn’t live without them. But they are terrible things, because by deferring the cost of things, they lull you into thinking that you are better off than you are. I use my debit card whenever I can, but even that can be misleading. There is something psychological about handing cash to the merchant; it feels more real. Do you find that? If I go to the ATM and get $200 out, I find that I am a lot more thoughtful about spending it than if I just slide the debit card.

Anyway, Gabler’s overall point is that we Americans are doing less well than we think we are, and that we continue to shield ourselves from this reality because we have this ineradicable hope that it’s just about to be morning in America (“Gatsby believed in the green light…”). Please, read the whole thing.

I have a couple of thoughts. One, when Gabler says that he and his wife are “financial illiterates,” he could just as well have been talking about me and my wife. Fortunately, my wife realized this about a decade ago, and contacted a financial advisor, one who specializes in working with artists and writers. I don’t know where we would be without Chris Currin’s help over these last years. Unquestionably a lot less secure than we are today, because he has helped us invest wisely, to stash a lot away for retirement, and to save bigtime on taxes. I’ve had some very nice income years since we moved back to Louisiana and I started writing books, but if we had not had Chris there to impose discipline on us, I would have foolishly spent a lot of the money that’s now sitting in a 401(K). I don’t think this is because I’m a bad person, necessarily, but rather that I am someone who has a totally unrealistic sense of money. (Me: “Hey, it would be nice to have a nice bottle of wine with dinner tonight. I’ve got $2,000 in the checking account. Why not?” That is an incredibly stupid way to think about money, because you end up nickel-and-diming yourself to death.)

So, my advice to you is this: if you can afford it, get a reputable financial advisor. Really, it’s the smartest thing we have ever done. Julie and I recognized our weakness in this area, and sought help. It has made a tremendous difference.

The other thing I want to point out is how incredibly difficult it is to overcome the force of culture. People do what their neighbors and peers do. When we got ready to buy our first house, back in 2005, a number of our friends were skeptical of the little house we bought in a transitional neighborhood, for $165,000. We could have afforded a bigger house in a nicer neighborhood, but we were really scared about taking on a lot of housing debt, and besides, we loved that little house. It was big enough for us.

We had to sell it in 2010 when we moved to Philadelphia. The housing crash was still a big thing in Dallas. We had to pay the mortgage on that house for six months before it sold, and in that time we watched our nest egg wear away. The anxiety was so intense that it no doubt contributed, along with my sister’s terminal cancer diagnosis, to my developing chronic mono in that period. When the house finally sold, it was for precisely what we paid for it. But we lost over $50,000 in the deal, because we had spent heavily on fixing the house up. Still, we were lucky. Had we done what most people in our income bracket had done, the losses might have wiped us out.

The point is that to live a more financially stable life in America today requires the ability to be strongly countercultural. It requires fighting the tendency within oneself to believe that one deserves to live in a certain manner, because to do otherwise would be inauthentic. You may think there’s safety in numbers, because everyone is doing it, but the thing our mamas used to tell us when we were little kids is still true: if everybody was jumping off the cliff, would you do it too?

The trick is being able to see that everybody is jumping off the cliff, not simply jumping for joy at being able to live in the manner in which we believe we’re entitled.

I was talking the other day to a man who owns a small landscaping business. He said his biggest problem is with labor. “People don’t want to work,” he said. “They watch TV and think that they should be able to live a certain way, but they don’t want to work for it. I’ve got more work than I can handle, but I can’t get people to stick with it. They want it handed to them. It’s crazy. It didn’t used to be like this.”

No, it didn’t. He’s talking about a degraded working class ethic, but we middle class people have our own version of this. We are willing to work; that’s the easy part. We aren’t willing to live within our means. Doing so is very, very hard. I’m as implicated in this as anybody else.

Hey grumpyrealist,
You can still find machines that count coins at grocery stores. Just dump the coins in, get a print out, and take it to customer service for reimbursement. A great way to handle accumulations of spare change.
The best known one is CoinStar, and you can find a nearby machine here: https://www.coinstar.com/findakiosk

re: library books.
Often I end up buying a book that I had previously checked out at the library. If it’s good it’s one I want to own.

Also, I get large print books for my mother at the library. (Now I’m finding I like large print more myself, sigh). It is very hard to get a hold of books in large print except for popular thriller or romance books, which neither my mother or I like. But you can request a regular book in large print and often the library can get it through some kind of inter-library loan system.

Somehow I woke up about debt before it was too late … circa 2000. My parents were both frugal so maybe that is where it came from. But before that I was in debt up to my eyeballs and very stressed and unhappy. I finally got out of debt and have been completely debt free for 10 years. Downsized and paid cash for a house.

I get a lot of grief from peers, family, etc. over not spending as they do, so I understand the social pressure. Even I would have thought myself counter-cultural not that long ago. I just find I don’t need all the things I used to think I needed. I’m much happier with less.

There are a few things I spend money on: a nice bottle of wine every now and then, travel (albeit budget travel), long hot showers, my garden. I don’t have grandchildren yet but if/when I do I suspect I might go overboard there.

My biggest worry is a major health event. I have some savings and could downsize again if I must, but a major health event would probably wipe me out. I have pretty awful health insurance and I’m a ways off from Medicare.

I whined to my fiance just before I walked down the aisle “Everyone is going to be staring at me!” An exhibitionist/wanna-be princess I am not. I also tried to imagine my father cashing out a 401K to pay for my wedding and my head exploded.

More seriously, I often wonder on this site how to balance empathy and judgementalism. I am inclined to have no sympathy for Gabler and his ilk; on the other hand, am I taking for granted my analytic abilities, lack of susceptibility to peer pressure, and childhood training in a financially stable and conservative home?

It seems to me we all judge from our own experiences and should be on guard for that tendency. I for example, justify my hefty Kindle expenditures on the idea that I am subsidizing a profession that matters to me a great deal. Still, I am also (or really) doing it out of convenience and financial security. (I actually re-upped my library card yesterday for the first time in years because I didn’t want to pay $11.99 for P.D. James mysteries. I justified it by noting that she is dead and her estate is quite well rewarded.)

My first career was pension administration, culminating in my role as a pension actuary. This meant that I made final decisions about plan provisions and regulatory compliance on behalf of my clients, in consultation with their accountants and attorneys, and had a million-dollar liability bond backing me up if I goofed. My second and current career started with writing code for pension systems. I know this, intimately. The only thing I’m not is current on the details of regulations being applied and enforced.

First and foremost, the goal of retirement income is a long-range plan. It means, amongst other things, that this year’s return is not trivial, but not worthy of immediate concern when my need for the income is decades in the future. Thus, dire warnings about the next year are generally bogus, unless you have placed your retirement investment in high-risk vehicles, something for which only you can take responsibility. Don’t cry over spilt milk when you put the glass on the edge of the table that’s next to heavy traffic.

Industry standard advice: know your risk tolerance. The older you are, the less risk you want.

The shift from “traditional” pensions — defined benefit, in which category Social Security is included — to defined contribution plans, like 401(k) (named for a section of the Internal Revenue Code) was definitely on the cost of administering them, but also and a very close second on the cost of employers’ contributions. This is critical to understand: the pension contribution is fully deductible to the corporate tax rate. If it’s 25%, that means that one-quarter of the contributions is directly subsidized by a reduction in tax revenue.

The turning point was the junk-bond leveraged buyout fad that climaxed in the 1980s. The seminal event was one “merger” where the absorbed company’s defined benefit plan was significantly “over-funded”, which meant two things: the accrued benefit liability was covered completely; and future contributions were going to be discounted for it. The primary target was that pension plan’s funds, and the existing rules for terminating plans. Only accrued benefits are guaranteed. once they are covered, the rest of the money reverts to the employer. This was pillage and burn at its finest, because those “excess” funds ended up in the pockets of investors.

It always works both ways. During my tenure, companies that found themselves unable to afford the defined benefit plan didn’t just terminate, they converted them to defined contribution plans and continued funding them, just at lower amounts. The simplest comparison point is the profit sharing plan. It gets a contribution only in years the company shows a profit.

Personal note: the only reason to “privatize” Social Security is to make the money available to investors for their profit. There is no benefit to workers. The only risk to future benefits resides in the political maneuvering of Congress. The plan itself is stable and sound, overseen by actuaries who apply the same discipline as they do to private plans. Again, your comparison point is the union plan, which can be arbitrarily changed year-to-year under a CBA by either side, often with no rational connection to the profitability of the business… which is why, however much I support them otherwise, public sector unions are on balance a very bad idea. As to Congress, the primary reason I left that first career was that during the 80s Congress amended, repealed or added to the pension laws on average every six months. Being on the front line of regulatory compliance, not to mention protecting my clients from violations thereof, was an exercise in slowly going insane during periodic spurts of utter chaos. At one point, I spent six months terminating plans that had become illegal due to an amendment; a few weeks after the last one was done, the amendment was repealed.

Another large contributing factor, which for some strange reason you didn’t mention, was his wife quitting her executive position. Between a film executive and a writer, who is more likely to earn a more stable income? (Her.) Who is more likely to be able to take time off and then come back to the same work? (Him. And he even said that she never managed to.) So if they were so gung-ho to be a single-income family, HE should have stayed home for those years.

As a financial advisor, this post hits quite close to home. The stories I could tell you about the stupid financial moves many individuals have made would make Gabler’s look tame. When I started in this business, a wise, experienced, old timer, told me to target neighborhood’s with “small houses and large trees vs. large houses and small trees.” The point was that those in small houses lived within their means while those with the large houses often bought more than they could afford. I found this advice to be spot-on.

Thank you Rod for giving my industry a good name. We often get so criticized in the press. I have had a client for almost 20 years. She is 93 and living in assisted living. Because of me, she still has money to provide for her share of the expenses and will probably have something left over for her children. This has always been her life’s goal. As with any profession, there are bad and good. Use recommendations from friends – as Rod has provided here – and if you cannot do yourself, which few can, it will be the best money you spend.

[NFR: Barb, if you have the time, I would love to see your list of, say, Top Ten Worst Financial Mistakes Ordinary People Make. You could send it to me at rod — at — amcon — dot — mag, and I’ll make it its own post. I’ll even put a link to your own business in there. — RD]

“Dominic, how does one make money on one’s own wedding? The picture that came to my mind was of guests being charged admission :)”

Basically, we took in more money in gifts from family and friends than we spent on the wedding.

We had the ceremony at my parish (Catholic churches do not charge for weddings or funerals, obviously) gave the honorarium to the priest, paid the organist, slipped the altar boy a $20 and my pal who served one of my old surplices. Flowers were minimal. Then we had the reception at a local KofC hall, which I got a nice discount for because I was an officer and (still) current member. Great thing about that sort of venue is you can bring in whatever food and booze you want. Some of my relatives manned the bar and we bought all the booze ourselves. We had a local place bring in food that didn’t cost an arm and a leg.

So…we started married life with money in the bank. Our honeymoon was also fairly cheap because we stayed in the country.

If this thread is not totally exhausted, I’d love to see discussion on something: I know a lot of traditional communities support couples getting married and having children young. (I didn’t do this, but believe it’s a good thing.) But to enable this, parents will likely have to provide monetary support to a couple who, say, marries at 23 and has children young, with one breadwinner.

Neal Gabler, you are a crappy manager of your own finances, but that in and of itself doesn’t make you a person that strangers on the internet should despise. It’s very brave of Gabler to open himself up for criticism, second guessing, just the general tsk-tsk’ing of a public quick to point out how unlike him we are. Is it a moral failing to be so incompetent at managing your money? I hope people realize that knowledge, practiced skill and a like-minded group of friends/acquaintances (maybe an advisor) can really help you get out of the sort of unfortunate financial choices that Gabler made. Embarrassing, sure. Shameful? I don’t think so. His coming out into the open hopefully spurs others to deal with their bad money habits.

Great article Rod – I actually came here looking to see if you’d posted your thoughts on what I found to be a very insightful article. I am a little surprised by some of the, not quite vindictiveness, but lack of grace I guess I’d say, from some of the commenters here. Gabler isn’t asking for pity, and by and large he’s owned up to his culpability in all this; I don’t think it’s necessary to pile on and exclaim what a huge idiot he’s been.

I actually tend to think my generation (Millennials) will probably value saving a bit more than prior ones. I graduated college in 2009, and though I went to grad school (and to be honest, finding jobs in my field was pretty easy even in ’08) I will definitely always remember the shock of the Great Recession. A lot of people my age had a really rough go of it, and that experience early in life is unlikely to make them quick to spend as they get older and finally get financially settled.

I’ve been incredibly blessed in terms of debt, having gotten full academic scholarships for both undergrad and grad schools, and plan to drive my paid-for car until the wheels fall off. I’m an Army brat and pretty accustomed to moving, so I rent a modest 2 bedroom apartment and have the option to leave more or less whenever I choose without having a mortgage to tie me down. I am 100% debt free, and have no intention of changing that until I finally meet that special someone and we get married and I have to buy a house.

But while me being debt-free is probably atypical of my generation, I’ve found that my almost visceral hate of debt is actually pretty common in my generation. Having had to take on insane student loans to attend even modest state schools (my full ride to my state school was worth $52,000 when I got it in ’05, now it’s worth $98,000 somehow) has left a lot of my cohort completely averse to buying things on credit that they can’t afford. They know intimately how crappy debt is, so they tend to try to avoid incurring more of it in their personal lives. Time will tell I suppose, but I actually do have hope that my generation will be more like the post-Depression kids than the spendthrift Boomers. At the very least our hobbies are cheaper – an Xbox One or PS4 isn’t exactly a car note.

And color me one of those kids who finds cash way too easy to spend. If I have money in my wallet it tends to disappear – I actually find it a lot easier to avoid spending money when I have to put it on my card, and in that case I’ve got an itemized list of where exactly my money has gone. I didn’t even carry cash routinely until I moved to Connecticut – gas is $.05 cheaper if you pay with cash here, so I’ve gotten into the habit of keeping some in my wallet :p

Caroline Nina in DC ,
One of my daughters married at 21 & is expecting #4 soon. Her husband works outside the home, she has an online business & homeschools.
They house-sit/rent a small home out in the country.
No parents on either side are in a position to help out financially, but they’re making it ok. There are a number of ways to earn income at home that weren’t possible before the internet.

Re: There are a number of ways to earn income at home that weren’t possible before the internet.

True, but people need to be very careful to avoid the scams. Anything that sounds like MLM should be given very wide berth. An honest job does not require any money up front– and you should be doing something, not selling something.

I read that article and was horrified, but then I realized that my husband and I are one of the few couples we know who has never faced a long period of unemployment, even though we have had plenty of jobs shot out from under us due to mergers (we work in financial services).

I attribute our luck to low self esteem–we both somehow feel we should take a job if it is offered. My husband hit a wall and went back to school to get a technology management MBA in his early ’40’s. He was out of the workforce for two years and somebody in his network offered him a systems analyst job before he graduated and he took it. The pay was less than half of what he made when he hit his wall but he thought the work was great and he loved the people. Three years later he was running his department.

I think mid-career people get stuck sometimes thinking they are worth a certain salary. I had an old Lou Grant boss back in the day who said “if you aren’t working, you are worth zero–and if I offer you more than zero, I’m offering you a raise.”

I’ve taken pay cuts the last two jobs I’ve taken and both have been good moves because I learned new stuff and met new people and expanded my network. I’d rather earn a little less and be a star than be highly paid and afraid for my job all the time.

“If for some reason the market for my writing dried up, and I had to take a job doing something else to support my family, I would do it.”

But what job would you take? You are assuming there would be a real, decent-paying, stable job to switch to. Such jobs are much more difficult to find than they used to be, especially when you are switching careers. It may be a peace of mind to think that way, but people who end-up there realize the hard part wasn’t the willingness to switch, but the fact it’s much harder to get hired to do something you don’t have a deep history of already doing.

Late to the party but… Mr. Gabler’s openness is refreshing. The comments here are not. Just more of the self-righteous Responsibility cult seeking to shame the already shamed.

Thank the 47% for craft beers, local artisan bakeries, indie bookstores, religious schools, local artists! Those things can make it because a significant enough number of people value what they contribute more than money sitting in a bank account. Will there be a reckoning? Possibly. We of the 47% live by feast or famine. On the edge of disaster? Yes. But who of us is really self-sufficient? Aren’t we all ultimately broke?

If all those 47% started living a la Dave Ramsey, so many jobs would disappear– oh boy, contraction! Yeah, we face seemingly unsolvable economic issues but doom seems oversold these days…

Think of the prodigal and miserly in Dante’s Inferno, two sides of the same coin. At the end of the day I would rather spend my time with the spendthrift, with those with unreasonable hope and joy who KNOW they have been irresponsible and deserve nothing but with thankfulness relish in the earthly gifts that are blessedly near. Warmth over ice. What is the more Christian way?

If this all sounds like self-justification, eh, I might be guilty, I am broke after all. Here’s to hoping there is forgiveness for prodigality!

“Living within our means” becomes a lot more difficult when the cost of “living” exceeds our means to live it.

I have a large folder on my desktop in which I drop the odd article or data point about the cost of things. It often contains articles on how the cost of, say, a t-shirt manufactured in Malaysia bears absolutely no sane relationship to the $35 or $75 price tag it carries. What worries me the most is food inflation. As the one who does the shopping the extraordinary inflation of food prices in the last decade more than adequately explains the poor diet that so many low-income Americans adopt, i.e., a whole chicken used to cost about $3.50 and now is often easily $9-$12.

What I see is the cost of things divorced from their actual value; from banking, autos and real estate to canned soup corporations are maximizing profits by impoverishing their
customers. And on the retail side all those “Sales” that aren’t really sales just add insult to injury.

Late to the party but… Mr. Gabler’s openness is refreshing. The comments here are not. Just more of the self-righteous Responsibility cult seeking to shame the already shamed.

Thank the 47% for craft beers, local artisan bakeries, indie bookstores, religious schools, local artists!”
***********************
Sorry to sound uncharitable, but with the exception of parochial schools, I’d really not be missing any of the above. And if everyone in a parish tithed, parochial schools would have free tuition anyhow.
So, I still would side with Dave Ramsey, just to get started anyway. Debt sucks.
🙂

Re: It often contains articles on how the cost of, say, a t-shirt manufactured in Malaysia bears absolutely no sane relationship to the $35 or $75 price tag it carries.

Where on Earth are you shopping? I have never paid anywhere near that much even for a dress shirt. (I got a nice dress shirt on sale for 12$ at Kohl’s last month).

Re: As the one who does the shopping the extraordinary inflation of food prices in the last decade more than adequately explains the poor diet that so many low-income Americans adopt

Again, I have to wonder where you shop. Yes, food prices went up overall (though often people notice prices increases only and fail to note when prices come down– food fluctuates a lot) — but “extraordinary”? Huh? I keep meticulous records of my spending. Since 2005 (the first full year when my household had its current composition, albeit I was living in another city in another state) my average monthly grocery bill– human food only– has gone up by about 20%. That’s over ten years, mind you, so 2% per year (although not really; some years there was virtually no increase, other years– 2007-2008 stand out– there was a big jump). Which, really, is anything but a horrible inflation rate.

“Again, I have to wonder where you shop. Yes, food prices went up overall (though often people notice prices increases only and fail to note when prices come down– food fluctuates a lot) — but “extraordinary”? Huh? I keep meticulous records of my spending. Since 2005 (the first full year when my household had its current composition, albeit I was living in another city in another state) my average monthly grocery bill– human food only– has gone up by about 20%. ”

I’d second that: one of my weaknesses is that, while I am a very good cook, I am somewhat OCD, and then to buy the same products, of the same exact brands, in the same exact order, every single week . My grocery bill hadn’t gone up in 3 years.

One other thing to point out, regarding how terrible the American economy has slowly become, is that not only were there many more in the middle class 45 years ago, many more families were able to reach it with only one spouse working.

Today, both parents often have to work full-time just to meet monthly expenses. And, they have no retirement fund to look forward to either.

The point is, many families are in much worse shape than people were in 2 generations ago, despite working many, many more hours outside the home. So, not only do they not have any kind of financial cushion, they have no flexibility either. Many families are already close to maximizing income with both spouses working.

A further point is that very few people own their own business, farm, or otherwise are in a position to work independently, in comparison to the last 100 years (those number dropped significantly in the first half of the 20th century, and have continued to do so).

So, not only are families having to work much harder than they did a couple generations ago, with no cushion and no retirement to look forward to, they have much less freedom in the type of work being performed. Most of us are someone else’s servant.

The cultural narrative is that it is so much better today than it was in America’s horrible, no-good, past. Overall, I just doubt whether that is true, and the outlook is certainly negative.

Isidore the Farmer ,
I don’t know. I’d agree that things aren’t so great these days & one salary doesn’t go very far. But if you look at the lifestyle many of our grandparents enjoyed a couple generations ago, it was pretty frugal.
Vacations were local-if at all. Families owned one vehicle- maybe. Family socializing was at church, not on electronic devices. No cable or internet bills.Etc.
We’ve been turned into compliant consumers for status goods. It’s not about how much money you make, it’s about how much you keep.

Just want to chime in to support those who have recommended Dave Ramsey’s approach to personal finance. I am not a Christian, and I don’t much care for Ramsey’s occasional Evangelical sermonizing, but his “get the hell out of debt and stay the hell out of debt” admonishments are likely the only way many of us can get our financial houses in order. His system is very simple, step-by-step, and just makes good sense. You can quibble over some details, but Ramsey’s system, diligently applied, has an excellent track record. And the best part is that his system is actually quite countercultural: you get to effectively say f*** off to a entire culture of marketing intended to entice you into penury by buying stuff you truly don’t need, and if you think for a second, you truly don’t want.

Depends on how far back you go for your “grandparents’ day”. Mine are a good ways farther back than most, owing to some long generational intervals in both sides of my family. All four of my grandparents, none of whom I ever knew), were born when Victoria was still on the throne and the years started with “18”. So no, they did not travel that much.
With their children it was another matter. My mother as a young woman c. 1950 made two trips to California, one by train the other by car, to visit relatives in California. My father, during his second marriage (1948-1957), took road trips all over the US. I’ve been to more states (he never got to Alaska or Hawaii) but there are still places he saw that I haven’t (e.g., Crater Lake). Neither of my parents were remotely rich. However they enjoyed the postwar prosperity which really was a very broad prosperity, not just a matter of the rich getting richer. OK, there were no cell phones, computers, internet, etc yet. But it was a time when the average person could have reasonable hopes of getting ahead by the sweat of his own brow, not by who he knew or who his parents were.

I have to wonder where you shop? Tell me so I can save some money. I happened to be watching Mad Money about a year back and Cramer complained that he went out to buy some snacks for a party and the bill nearly knocked him over. I often speak to the folks manning the cash registers and they complain about rising costs.

I don’t actually buy the $75 t-shirt or $9 whole chicken. I simply notice that when I am shopping for a t-shirt or a chicken I have to either wade through expensive ones for $12-$15 t-shirts(on-sale) or wait for a sale for $4 chickens. And yes, I shop at Safeway, Kohl’s, Walmart, et al. And I do all the cooking.

A variety of places, based on prices in the sales circulars. Walmart, Safeway, Shoppers (a local chain) and PriceRite (a discount store right up the hill from my house). A very few things from Whole Foods, believe it or not (at one point they had the lowest non-sale price on milk in Baltimore!). Occasionally I get a sale item at Target, Walgreen or CVS.

For clothes it’s usually Target or Kohls, rarely Sears or Penneys. Never pricey mall stores, rarely Walmart (too much trouble with the quality and the sizing).

A word of caution about inflation: consumer goods’ prices regionally often have a wide variation, even if that variation tends to be flattened by discounts and on-sale promotions.

The price of food in (for example) Nevada is going to be higher simply because it’s very unlikely to be locally grown or produced. Transportation costs have a significant impact on price fluctuations.

Here’s a local comparison point for you. We shop for produce in three places: supermarket, produce distributor outlet, and a local farm (weekly farmer’s market). $20 dollars worth at the supermarket costs about $12 at the other places, less because we do a flat-price market share deal with the farm, where we simply spend less than $20 because they offer (under the share) way more than my wife and I can consume in one week.

I spent about $400 a month when both kids were still in the house. I still spend $400/month long after they’ve left. With a household size same as yours. Shop at the same places. Don’t know if you have them but Sprouts is great for produce. Coupon clipping, sales, etc. I should clarify I’m shopping for a casual-wear t-shirt and not the tidy-whites. Don’t even get me started on the cost of a $3.00 loaf of chemically-laden bread or Levi’s – which I’ve been wearing since the 60’s.

Before we start swapping recipes – I think it is self-evident that the increase in food prices has increased well over the rate of inflation. Ramen Noodles didn’t become popular because they’re healthy or taste all that good.